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Last Updated : Jan 05, 2018 04:02 PM IST | Source: CNBC-TV18

Parliamentary panel proposes a cap on airfares

The panel said that the air ticket pricing mechanism of developed countries must not be applicable in India.

CNBC TV18 @moneycontrolcom

The parliamentary panel on aviation has recommended a cap on the airline fares. Apart from the upper limit on airfares, the panel has proposed that airlines must not be allowed to charge more than 50 percent of the base fare on cancellation, and that fare must be refunded to passengers.

The panel said that the air ticket pricing mechanism of developed countries must not be applicable in India, according to CNBC-TV18, and that the reduction in the aviation turbine fuel (ATF) is not being passed on the consumers in the form of reduced airfare.

The panel particularly pointed out the likes of budget airlines such as IndiGo for not doing so. It also put Jet Airways under the scanner, citing customer complaints.

Stating that these recommendations are not binding in nature, Kapil Kaul, a representative of CAPA said, “Every time we get to a festive season or the end of the year, airfares shoot up and there is a lot of hue and cry. But the moment we reach the 7th and 10th of January, consumers enjoy the lowest airfares.”

“What the lawmakers do not know that consumers have paid the lowest fares in India all over the world,” said Kaul.

He also stated that there is no rationale in providing an upper cap on airfares as the aviation sector faces USD 10-12 billion of losses. It is only in the past two to three years that airlines are making a profit.

“There is no merit for regulating airfare,” he said. “Regulating airfares is something that won’t be legally tenable in India.”
First Published on Jan 4, 2018 08:21 pm
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